Brokerage account tax question

Taxes
#1

Hello, if I put $10,000 into a brokerage account and invest that in different funds. And my account grows to $20,000, am I able to pull out the 10k I put in without paying at capital gain tax since that money I put in initially was already taxed? Thank you

#2

Hi Tom!

Yes, your “cost basis” for tax purposes is $10,000. So when you take your original $10,000 out you will not pay tax on this.

I hope this help!

#3

Hi Shane! Thanks for your response. Can you explain “cost basis” and how that works? I would assume I would have to sell shares of funds I invested in to withdraw the 10k back when needed.

Thanks

#4

Hi Tom - yes, you said it exactly right. You would sell shares to get your money. You can use “specific identification” to only sell the $10K that you originally put in.

This article is very good and explains everything in detail: